When goods are billed/invoiced to the customer, but not shipped. The goods should be segregated in the client’s warehouse and the client’s inventory accounting should reflect a reduction of that amount.
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Merchandise shipped by a client to a customer on credit after the factor has rejected or declined to assume the credit risk. The client is then responsible for any losses if the customer is financially unable to pay the invoice.

Client receives payment on earlier of:
– Payment by customer
– Bankruptcy or insolvency of customer
– Stipulated number of days after maturity if non-payment is due to financial inability to make payment.

A reduction in the selling price of the merchandise as indicated by the “terms of sale”. There are two types:
– A cash discount is an incentive for quicker payment. It is a deduction for paying within a stated shorter period of time.
– A trade discount is not a reduction for early payment. Rather it is a deduction which the customer takes because the discount offered is customary in a particular industry or the customer purchased merchandise in large quantities.

Notice to client from the factor stating a customer has refused payment on an invoice. Typical customer claims are that the merchandise was never received or merchandise was received damaged. A dispute must be resolved between the client and its customer.

A legal instrument issued by a factor to another lender guaranteeing payment of its client’s indebtedness to that lender. Often, the lender is another factor and/or a piece good supplier of the client.

A list of goods or property on hand. For manufactures inventory is usually tracked at three levels:
– Piece Goods or Raw Material – goods which are to be used in manufacture, but which are still in a natural or unmanufactured state.
– Work In Process – products or material on which some work or processing has been done, but which are not yet completely manufactured/processed.
– Finished Goods – manufactured items that are ready for sale.

The prime rate, as reported by The Wall Street Journal’s bank survey, is among the most widely used benchmark in setting home equity lines of credit and credit card rates. It is in turn based on the federal funds rate, which is set by the Federal Reserve.